Digital Transformation In The Age Of The Customer: A ...

1 A Forrester Consulting Thought Leadership Spotlight Commissioned By Accenture Interactive November 2015 Digital Transformation In The Age Of The Customer: A Spotlight On Insurance Table Of Contents Executive Summary .. 1 The Customer Experience Is At The Heart Of Digital Transformation .. 2 Insurers Have A Ways To Go On Their Path To Digital Transformation .. 3 Third-Party Solution Providers Plug The Gaps And Drive Transformation .. 5 Key Recommendations .. 7 Appendix A: Methodology .. 8 Appendix B: Supplemental Material .. 9 Appendix C: Endnotes .. 10 ABOUT FORRESTER CONSULTING Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations.

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3 For additional information, go to [1-TQC530] 1 Executive Summary The past five years have marked the beginning of the age of the customer, in which technology and economic forces have put customers in control of their interactions with businesses. These businesses, hoping to understand and serve customers in an increasingly disrupted global and Digital economy, are almost universally undergoing Digital Transformation , which involves realigning and investing in new technology and business models with a specific focus on the customer experience. In May 2015, Accenture Interactive commissioned Forrester Consulting to evaluate Digital Transformation among enterprises.

4 To explore this trend, Forrester tested hypotheses that firms are confused about what constitutes Digital Transformation (and who should drive it), and that many firms don t have the required skills to transform into digitally mature organizations. In conducting in-depth surveys with 396 business decision-makers (including 108 senior insurance leaders, on whose responses this industry-specific report is based), Forrester found that although companies are actively working to transform their organization, processes, and technology in pursuit of a more effective Digital business and a more satisfying customer experience, they still have a lot of room for continued development of their capabilities.

5 KEY FINDINGS Forrester s study yielded three key findings: The customer experience is at the heart of Digital Transformation . With customers in the driver s seat of their interactions with brands, insurers must create positive and relevant customer experiences across channels and touchpoints. Although most firms are confident that the experiences they provide surpass those of their competitors and at least meet the expectations of their customers, this is not supported by the findings of other recent business and consumer surveys. As a result, Digital development and customer experience improvement are two key priorities for insurers.

6 Insurers are on the path to Digital Transformation but have a ways to go. Insurance carriers are making strides across the three dimensions of Digital Transformation organization, operational process, and technology but are still struggling with traditional silos and a lack of integration and alignment. Many are stuck offering an average Digital experience with limited understanding of what to do next, who should lead, and how to measure success. Their focus is more on customer transactions and exploring new Digital capabilities than on using Digital to build customer-centric relationships and develop game-changing innovation.

7 Reliance on third-party providers confirms the lack of internal capabilities and highlights the need for insurers to shift toward open business models. To preserve internal resources, reduce time-to-market, and overcome gaps in capabilities, many carriers turn to third-party solution providers for help with their Digital Transformation . But this is taking them only so far. Many need to acknowledge that, on their own, they cannot provide the more relevant experiences customers are increasingly demanding. Only by forming or joining ecosystems that offer a broader range of more appealing products and living services will they be able to play a more active and engaging role in their customers lives.

8 Digital experience is a top priority for the company in terms of resource allocation.. It affects prospect and customer experiences, and we want to improve both. Director at a US-based insurance enterprise Only 9% of insurance organizations feel that they have mastered Digital to a point of differentiation from their competitors. 2 The Customer Experience Is At The Heart Of Digital Transformation In the age of the customer, consumers are in control of their interactions with businesses. Inundated by endless sources of information, customers expect ready access to content that is personally relevant in the context of what they are doing, at any time, anywhere, and in the format and on the device of their choosing.

9 Attracting, winning, and retaining customers in this environment requires a concerted effort from across the business : The organizational structure, company culture, business technology, and partner ecosystem must all be integrated across the value chain and aligned in service of customers, in the spirit of delivering to them exactly what they want. Independent and redundant customer views, processes, databases, administration, and IT functions must be eliminated. For this reason, Digital and customer experience strategies are inexorably linked. Almost every change that organizations make to aid in their Digital Transformation is also in pursuit of a better customer experience, whether directly or indirectly.

10 Our study found that: Key drivers of Digital Transformation are customer satisfaction and profitable growth. When we asked insurers to rank their top drivers for Digital Transformation , the drivers that came out on top were improved customer satisfaction (63%), increased profitability (53%), improved ease of doing business (44%), and quicker time-to-market (37%). Insurers are in no doubt that the customer experience and Digital Transformation are key to their future financial performance. Improving the customer experience and growing revenues are top strategic priorities. The previous finding is well-aligned with insurers business objectives.